Trade groups ask court to stay SEC's conflict minerals rule

WASHINGTON May 5 Three trade groups on Monday
asked a U.S. appeals court to stop the Securities and Exchange
Commission from implementing a new rule requiring companies to
determine if their products contain "conflict minerals" from a
war torn region in Africa.

The filing, by the National Association of Manufacturers,
the U.S. Chamber of Commerce and the Business Roundtable, marks
a last-ditch effort by the groups to put the rule on hold before
it goes into effect on June 2.

The SEC's conflict minerals rule stems from a provision in
the 2010 Dodd-Frank Wall Street reform law that requires
publicly traded manufacturers to disclose to investors whether
any tantalum, tin, gold or tungsten used in their products may
have originated from the conflict-ridden Democratic Republic of
Congo (DRC).

In April, the U.S. Appeals Court for the District of
Columbia Circuit struck down a provision of the rule that forces
companies to tell investors whether if their products are not
"conflict free" on the grounds it violates free speech.

However, the court left the rest of the rule largely intact.

Last week, top SEC officials said they planned to press
ahead with requiring companies to comply with provisions that
were not deemed unconstitutional.

In guidance released to companies, the SEC said it expects
them to still conduct the required due diligence to determine
the origin of the minerals and file any required reports with
the commission.

However, companies will not be required to declare whether
their products are conflict-free or not, and certain audit
requirements will also be waived.

In an emergency request with the court, however, the three
groups argued that "the current rule makes little sense" without
the "compelled disclosure" and that the SEC should have issued
notice and comment before proceeding to implement the rule.

"Because of the agency's decision to enforce a tremendously
costly rule that no longer achieves the statute's goals and that
will likely be vacated, appellants respectfully seek a temporary
stay of the rule until the district court's decision on
remand regarding the appropriate remedy," they wrote.

The three groups asked the court to weigh in on their
request by May 26.

They announced their plans to seek the stay last week, and
at that time, an SEC spokesman declined to comment on the
request.
(Reporting by Sarah N. Lynch; editing by Andrew Hay)

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